Author Topic: Case Study: Retire @ 40 w/ 3 kids + 1 dog  (Read 18476 times)

austin_ice9

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Case Study: Retire @ 40 w/ 3 kids + 1 dog
« on: May 14, 2012, 04:34:46 PM »
I would like to quit working full time and take up a semi-Mustachian lifestyle.  I'm not hardcore enough to live like MMM, so I am looking for a middle ground between MMM badassity and clueless consumerist.

It helps me to write out my thoughts, and people can chime in if they think I'm being naive, stupid or both.

I'm 40 years old, married, and currently have two kids, ages 16 months and 3.5 months.  Planning on another soon.  Three is the planned limit though.  Suppose we could have twins -- let's not worry about that now.  Also have a 6-year old yellow lab -- she's family.

OK, passive income through dividends is about 43K/year.  That is the only source of passive income in non-retirement accounts.

MMM would probably say what the hell are you waiting for dude, pull the trigger.  I'm not quite sure though.  3 kids is a lot more than 1.  I am not badass.

No debts other than mortgage, which is at 250K now.  I've been using mint to track expenses... averaging about 5.5K/month as:

2500:  mortgage (5.5%, 15 year)     
400:    utilities                                    // austin, tx
100:    lawn care                                // seems like a good thing to outsource in austin
130:    cable, phone, internets           // cable -- I know, I know
75:      smartphone

700:    food + dining                          // baby food is expensive
500:    shopping (amazon, target)     // basically all non-food expenses

50:     gas                                          // work from home
120:   kids activities

-----
4575

OK, that only added up to 4575.  But we seem to average around 5500 due to non-regular expenses like insurance, HOA, medical/dental, pet stuff.

Oh, something I forgot is property tax -- runs us $10K/year here.  I pay that all in one shot.

Clearly I can't retire on $43K/year with a yearly burn of $76/K.  Here is my escape plan:

* move somewhere with low property tax, and hopefully low state income tax (and low cost of living in general!)
* downsize to something like 2500-3000 square feet (currently @3700 square feet)  // sorry if this makes me sound like a douche
* get a 30 year mortgage
* apply some basic Mustachian badassity to reduce expenses (ditch cable, cheaper smartphone plan, smarter grocery shopping, avoid buying new when possible)
* roll over 401K into IRA, invest in dividend paying stocks, and pull that out w/10% penalty.  This should net $20K/year after tax
* deploy some cash into more dividend stocks, probably adding 3K/year
* pick up a health care plan with a fairly high deductable
* backup plan for extra income: freelance/contract coding  // don't want to count on this though

In theory this sets me up with 66K/year passive income, which should beat inflation over time due to dividend increases.  I feel confident I could get the total monthly burn down 5K, even with allocating $750/month for health care insurance.

Why do I want to do this by the way?  I want to spend more time with my family, and still have time to go on long runs or other stuff.  It's weird, after having kids, I don't have time for working anymore.

Please point out the flaws, omissions, and plain stupidity in my plan.














smedleyb

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #1 on: May 14, 2012, 05:41:07 PM »
43K dividend income?  You must be around 2 million in investments, and probably more.  That's a nice number.

Maybe liquidate a piece and/or combine with equity from current home, buy a house around 2K square feet (with a basement for future family room?) around 200-250K in a cheap tax state (like MMM's Colorado).  Cut your utilities in half, trim another 40% off telecom, shop 20% less -- that should knock your monthly nut to around 3-3.5K a month.   

You can retire tomorrow. 

Where does the spouse stand in all this?  Where do you stand?  In general it's hard to voluntarily go from 3700K square feet to something half that size.  How many of us can go from a consumption driven lifestyle to an ecologically efficient, less taxing, mentally and physically liberating mustachian mode of existence where pleasure is derived from doing and connecting to people/things rather than purchasing/using/discarding the world and the objects in it?   

But if anyone can make that move right now, it's you (given the passive income, and your general badassity in general like high savings, no revolving/auto debt, etc.)

Good luck!



 

arebelspy

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #2 on: May 14, 2012, 06:20:53 PM »
Work on cutting your expenses as is, and see how you like it.  You don't have to start being hardcore right away, you can ease into it.  But you definitely should start making some changes, even if minor, today.
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gooki

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #3 on: May 14, 2012, 07:17:59 PM »
I would't worry to much about moving to a state with low income tax, as once you retire your income will drastically reduce. But cutting down on land tax would be wise (smaller home or different area).

I'm also of the opinion your plan is overly focused on dividend paying stocks. I'd diversify more.

If you become mortgage free you've reduced your monthly expenses by 50%. Consider not havering a mortgage when you down size or have one for a short period of time (like the next two years while you are still working), at a lower interest rates, that will be cleared by the item you semi retire.

Essentially you are in a very good position now. And it's comes down to how you want to live long term.

Say you get rid of the mortgage and land tax is $5k a year on your new home (still on the high side). Your annual expenses are $41,000 and you don't have to make any lifestyle changes other than shifting house.

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #4 on: May 14, 2012, 07:55:03 PM »
Assuming you are approximately content with your current health-care coverage, I'd delay anything that would affect its availability until you are done adding to your family (given that it appears you are planning to proceed in having another child within the next few years), and particularly until we know what legal rights (regarding pre-existing conditions and so forth) will or won't be preserved when the Court rules on the recent reforms.

I'd also carefully consider the quality of the public schools as you make a decision about your move, particularly if you plan to buy (not rent) immediately.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #5 on: May 14, 2012, 08:33:21 PM »
43K dividend income?  You must be around 2 million in investments, and probably more.  That's a nice number.

Maybe liquidate a piece and/or combine with equity from current home, buy a house around 2K square feet (with a basement for future family room?) around 200-250K in a cheap tax state (like MMM's Colorado).  Cut your utilities in half, trim another 40% off telecom, shop 20% less -- that should knock your monthly nut to around 3-3.5K a month.   

You can retire tomorrow. 

Where does the spouse stand in all this?  Where do you stand?  In general it's hard to voluntarily go from 3700K square feet to something half that size.  How many of us can go from a consumption driven lifestyle to an ecologically efficient, less taxing, mentally and physically liberating mustachian mode of existence where pleasure is derived from doing and connecting to people/things rather than purchasing/using/discarding the world and the objects in it?   

But if anyone can make that move right now, it's you (given the passive income, and your general badassity in general like high savings, no revolving/auto debt, etc.)

Good luck!

2K square feet is probably too small for us -- a family with 3 kids and one large dog.  I think the sweet spot will be around 2700 square feet.  Not as severe as a 50% downsize, but still significant.  Probably talking in the 350K range for something newer or updated, and in a good school district (planning on public schools).   

As far as how I stand -- I am frugal by nature, so it won't be hard for me.  I got to my current financial position through hard work and saving/investing.  I have had some lifestyle inflation since getting married and having kids though.  My spouse is a bit wary, mainly due concerns about health care.  I'm originally from Canada, so I maybe I don't know enough about health care in the USA to be worried enough about it.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #6 on: May 14, 2012, 08:37:07 PM »
Work on cutting your expenses as is, and see how you like it.  You don't have to start being hardcore right away, you can ease into it.  But you definitely should start making some changes, even if minor, today.

Yeah, I actually have been moving in that direction.  Realized I was throwing away 300/year for a home alarm monitoring system... the alarm still goes off w/o the monitoring, so I couldn't really justify the cost for that.  Got rid of the monthly lawn treatment program (what a waste that was -- no I just fertilize myself, and pull weeds by hand).  Gave up drinking soda, and in general don't eat out as much.  Still lots of ways to optimize spending, which makes me not too worried about the expenses side.  It's just finding out what tradeoffs we are happy with, and making sure we aren't doing stupid shit.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #7 on: May 14, 2012, 08:42:51 PM »
I would't worry to much about moving to a state with low income tax, as once you retire your income will drastically reduce. But cutting down on land tax would be wise (smaller home or different area).

I'm also of the opinion your plan is overly focused on dividend paying stocks. I'd diversify more.

If you become mortgage free you've reduced your monthly expenses by 50%. Consider not havering a mortgage when you down size or have one for a short period of time (like the next two years while you are still working), at a lower interest rates, that will be cleared by the item you semi retire.

Essentially you are in a very good position now. And it's comes down to how you want to live long term.

Say you get rid of the mortgage and land tax is $5k a year on your new home (still on the high side). Your annual expenses are $41,000 and you don't have to make any lifestyle changes other than shifting house.

I agree the lower property tax is more important than the state income tax.  Still, all things being equal, I'll take the state that has the lower state income tax.  Two states with low taxes I am looking at are Colorado and Tennessee.

I have thought about paying off the mortgage by selling some stocks.  The reason I have not done that now is I have a high income currently, so the tax deduction on the mortgage interest is meaningful.  If I retire though (and my income becomes relatively small) that tax benefit goes away, so I should give that idea some serious consideration.  I believe I can get a higher net return by investing versus paying off a low-interest rate mortgage... but there is certainly a peace of mind factor in not having a mortgage payment.

I thinking of doing this in a matter of months btw, not years!

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #8 on: May 14, 2012, 08:49:11 PM »
Assuming you are approximately content with your current health-care coverage, I'd delay anything that would affect its availability until you are done adding to your family (given that it appears you are planning to proceed in having another child within the next few years), and particularly until we know what legal rights (regarding pre-existing conditions and so forth) will or won't be preserved when the Court rules on the recent reforms.

I'd also carefully consider the quality of the public schools as you make a decision about your move, particularly if you plan to buy (not rent) immediately.

That's a good point about the health care.  I was thinking I would go w/Cobra if I couldn't get the coverage, since we want to have the baby asap.  Of course, it could take longer.

Definitely plan on public schools, so that is a super-important factor.  Luckily, I won't be tied to a job, so we can be selective about where we relocate to.

gooki

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #9 on: May 14, 2012, 09:23:06 PM »
I thinking of doing this in a matter of months btw, not years!

I which case I think you've already made up your mind and you just need a final shove do it.

What's the worst that's going to happen? You find you need to earn a couple of extra grand a year for unforeseen expenses. Something that can easily be achieved with a  few weeks contract work. Having your own business may even give you additional gains as you'll be able to shift a few of your current expense into business expense and get tax write off's that way.

And if you keep your mortgage after retirement, you might even be able to assign some of your mortgage expenses as business expenses.

PS my recommendation to be mortgage free is based on your current interest rate, and the idea of using your current excess income to pay it down (vs selling shares). By using your current income you're locking it away so you don't get into the habit of inflating your lifestyle.

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #10 on: May 14, 2012, 09:46:03 PM »
That's a good point about the health care.  I was thinking I would go w/Cobra if I couldn't get the coverage, since we want to have the baby asap. 

OK.  I see nothing in your description of anticipated expenses that accounts for the cost of COBRA -- have you priced it?  Its expense notwithstanding, you have more legal protections with COBRA than other options in the US (I am not sure how the reforms have affected this -- they may have improved non-COBRA options -- but per a quick internet search maternity coverage is not required to be included with individual plans under the reform law until 2014 -- and of course, the pending Court case may affect that (in case you've been living under a rock, the Supreme Court has heard a challenge to the constitutionality of so-called Obamacare, and is scheduled to issue its ruling sometime in June).  Individual policy maternity coverage can be purchased (at least in theory), but it will cost extra.).  I personally would choose to keep COBRA at least through the pregnancy/birth to make sure the baby arrives safely *and* without needing extra medical attention in its early months (no, that's a lie:  I personally would not forego group coverage if I were contemplating a pregnancy.  But I certainly wouldn't plan to leave employment and forego COBRA if I were planning a pregnancy.), though I suppose if moving the entire family up to Canada and having everyone covered there is an option, then you at least have that as a fallback that most of us lack.

Still, to make a long story short, I'd research what you're considering (health-insurance wise), what it will cost, and what legal protections you will have before you make any leaps.

smedleyb

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #11 on: May 14, 2012, 09:50:24 PM »
2K square feet is probably too small for us -- a family with 3 kids and one large dog.  I think the sweet spot will be around 2700 square feet.  Not as severe as a 50% downsize, but still significant.  Probably talking in the 350K range for something newer or updated, and in a good school district (planning on public schools).   

As far as how I stand -- I am frugal by nature, so it won't be hard for me.  I got to my current financial position through hard work and saving/investing.  I have had some lifestyle inflation since getting married and having kids though.  My spouse is a bit wary, mainly due concerns about health care.  I'm originally from Canada, so I maybe I don't know enough about health care in the USA to be worried enough about it.

Lifestyle creep is the enemy of FI.

I like Arebelspy's basic idea:  keep cutting costs to the bare minimum, then reassess in 6-12 months.  In the meantime, maybe channel all savings into a kind of private health account which can be used exclusively to pay medical expenses (supplementing a high deductible health plan) for the next decade and beyond. 

As far as home size goes, find the best fit at the best price in the best area, and use it as a springboard to raise your family.   But realize that the only thing holding you back is the 48K you spend yearly on your house.  Moving into a smaller home, with no mortgage, at a very low property tax rate, should cut your housing expenses by 80%.   A radical rethinking of your housing situation might be the only thing holding you back from the good life.

zweipersona

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #12 on: May 14, 2012, 09:57:19 PM »

400:    utilities                                    // austin, tx

It's kinda funny, the way you write reminds me of programming languages.

Anyway, 400 in utilities is an incredible sum.  You should be able to cut that significantly.  I assume the majority of that is electricity?

http://michaelbluejay.com/electricity/

This may be an excellent source for you.  If I were to guess you could cut a significant chunk of that utilities bill by applying some of the knowledge on that site. 

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #13 on: May 14, 2012, 10:21:43 PM »

I like Arebelspy's basic idea:  keep cutting costs to the bare minimum, then reassess in 6-12 months.  In the meantime, maybe channel all savings into a kind of private health account which can be used exclusively to pay medical expenses (supplementing a high deductible health plan) for the next decade and beyond. 


The private health account for medical expenses is only available if you have a high-deductible health plan, and that, in turn, is unlikely to offer savings as compared to an employer-subsidized plan (unless your employer offers high-deductible as an option) in a context (two small children and a third hoped for) where you are probably making pretty regular use of health care services.  That's not to say you shouldn't look into this idea, it's just not obvious it's a money-saver. 

Also, the high-deductible plan / tax-sheltered savings for the future only works if you aren't actually spending on health care (or are willing to use not-tax-sheltered dollars while allowing the tax-sheltered ones to stay put, I suppose), which, again, seems unlikely for the scenario the OP describes.

smedleyb

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #14 on: May 14, 2012, 10:38:51 PM »
I literally mean a separate account for just medical expenses -- not connected to an HSA but a cash buffer for unexpected medical outlays, or money that could be placed into an HSA on a yearly basis for the tax breaks
« Last Edit: May 14, 2012, 10:40:37 PM by smedleyb »

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #15 on: May 15, 2012, 08:33:06 AM »
Oh, sure, that (separate account) would be a good idea, though it doesn't (until eligible) have any of the tax savings advantages (and then only if not spent, as noted).  But yes, setting $$$ aside to cover (potential) medical expenses makes sense, totally agree there.

fiveoh

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #16 on: May 15, 2012, 08:56:04 AM »
I would't worry to much about moving to a state with low income tax, as once you retire your income will drastically reduce. But cutting down on land tax would be wise (smaller home or different area).

I'm also of the opinion your plan is overly focused on dividend paying stocks. I'd diversify more.

If you become mortgage free you've reduced your monthly expenses by 50%. Consider not havering a mortgage when you down size or have one for a short period of time (like the next two years while you are still working), at a lower interest rates, that will be cleared by the item you semi retire.

Essentially you are in a very good position now. And it's comes down to how you want to live long term.

Say you get rid of the mortgage and land tax is $5k a year on your new home (still on the high side). Your annual expenses are $41,000 and you don't have to make any lifestyle changes other than shifting house.

I agree the lower property tax is more important than the state income tax.  Still, all things being equal, I'll take the state that has the lower state income tax.  Two states with low taxes I am looking at are Colorado and Tennessee.

I have thought about paying off the mortgage by selling some stocks.  The reason I have not done that now is I have a high income currently, so the tax deduction on the mortgage interest is meaningful.  If I retire though (and my income becomes relatively small) that tax benefit goes away, so I should give that idea some serious consideration.  I believe I can get a higher net return by investing versus paying off a low-interest rate mortgage... but there is certainly a peace of mind factor in not having a mortgage payment.

I thinking of doing this in a matter of months btw, not years!

Why move to Colorado or Tennessee when TX has no state income tax?

I realize we have higher property taxes in certain areas but you can find plenty of places in TX to live with low ones.  For example:  My wifes parents live in a "premier school district" in a houston suburb.  Total taxes are 4-5% a year.  My wife and I live in the district next door to that one and pay right at 3% a year(still a great school district)... a friend of mine moved out more towards the edge of the town(2 acres + lots have to drive 5 mins or so to get to a grocery store) and pays 1.5% a year.   

Austin is notorious for high housing costs. 

kdms

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #17 on: May 15, 2012, 12:11:55 PM »
700:    food + dining                          // baby food is expensive

My two cents, which has nothing to do with moving or investment advice: I have a 19 month old and we spent $0 on baby food.  I'm assuming, because of the reasoning provided above, that you're buying baby food.  Make your own and stop buying the stuff....it'll save you hundreds of dollars and keep your kids digestive tract free of all the preservatives that come free with the stuff (even the so-called organic baby food.)  If nothing else, their guts will thank you for it. :)

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #18 on: May 15, 2012, 12:23:37 PM »
Why move to Colorado or Tennessee when TX has no state income tax?

I realize we have higher property taxes in certain areas but you can find plenty of places in TX to live with low ones.  For example:  My wifes parents live in a "premier school district" in a houston suburb.  Total taxes are 4-5% a year.  My wife and I live in the district next door to that one and pay right at 3% a year(still a great school district)... a friend of mine moved out more towards the edge of the town(2 acres + lots have to drive 5 mins or so to get to a grocery store) and pays 1.5% a year.   

Austin is notorious for high housing costs.

If I am not working, my income will be relatively low -- so state income tax isn't that important.  Not saying has no impact, but property tax will be a much bigger factor for me.

I want something like the 0.6% property tax like you can get in CO or TN.

gooki

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #19 on: May 15, 2012, 01:02:46 PM »
700:    food + dining                          // baby food is expensive

My two cents, which has nothing to do with moving or investment advice: I have a 19 month old and we spent $0 on baby food.  I'm assuming, because of the reasoning provided above, that you're buying baby food.

If you are looking at cutting down expenses, I second this.

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #20 on: May 15, 2012, 06:55:23 PM »
700:    food + dining                          // baby food is expensive

My two cents, which has nothing to do with moving or investment advice: I have a 19 month old and we spent $0 on baby food.  I'm assuming, because of the reasoning provided above, that you're buying baby food.  Make your own and stop buying the stuff....it'll save you hundreds of dollars and keep your kids digestive tract free of all the preservatives that come free with the stuff (even the so-called organic baby food.)  If nothing else, their guts will thank you for it. :)

I'm assuming you're buying formula for the infant because otherwise -- yeah.  And I say this as someone who did buy (some) (organic) baby food but mostly, not so much (fed him grownup food appropriate for people with few or no teeth, sometimes with a little prep and sometimes, not -- yogurt, applesauce, bananas), so -- yeah.  If the "baby" food is for the 19-month old, I vote this as a place to cut back on costs.

cosmie

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #21 on: May 15, 2012, 07:17:33 PM »
For baby food, I strongly encourage the use of a baby food maker such as the Baby Chef Ultimate Food Maker. You can also use a normal food processor and ice cube trays, if you just want those features. But the maker is still worth its money; it self contains steaming foods, pureeing them, works as a bottle warmer before they're onto baby food, and is super easy to clean.

It's the biggest money saver you could invest in, and it's really not that hard.

Gerber: $1 gets you 1 serving of organic sweet potato, high in preservatives.
Homemade: $1 gets you one organic sweet potato, that makes over 6 (Gerber-sized) servings, preservative free.

Freeze the portions into ice cube trays and put them into ziplock bags when frozen. Frozen, they last over a month. In the fridge, they last a week or so. Pop them out of the freezer into a bowl, microwave for a minute, and serve.

As for Tennessee, if you want to move to Tennessee I strongly encourage East Tennessee (Knoxville area). It's a much more peaceful area than west Tennessee (Nashville area), as well as more progressive.
« Last Edit: May 15, 2012, 09:21:47 PM by cosmie »

fiveoh

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #22 on: May 15, 2012, 09:08:39 PM »


I want something like the 0.6% property tax like you can get in CO or TN.

Wow!  I had no idea the property taxes were that favorable in CO.
[/quote]

Me either....

bdub

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #23 on: May 17, 2012, 08:30:57 PM »
As a former 12-yr resident of Austin, two things stand out:

1.  100/mo for lawn care.  If you are on the typical austin 0.15 acre lot, you are wasting your money.  Unless you live on a serious hill/cliff, do this yourself.  At a minimum, this should come out of the budget once you are retired.  My 86 year old grandmother and her 92 year old husband mow their own 2+ acre lot; you can do it too!
2.  10K/yr for taxes tell me you house is worth >$400K.  A 2700 sq ft house in a good school district in Austin can be found for  250-275K if your willing to look outside of the premier districts.  We sold a similar size house in a nice area (620/Parmer, if you know the area) that was in RRISD.  We sold in late '07 for 245K; that house went on the market late last year for $280K. 

PS.  Don't move to CO; it is full of Texans, Californians and Yankees, just like Austin :)

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #24 on: May 18, 2012, 06:28:09 AM »
A 2700 sq ft house in a good school district in Austin can be found for  250-275K if your willing to look outside of the premier districts. 

Hot damn. Makes me hate living in a high cost of living area.  My modest 40yr-old townhome cost us $390k in a suburb of DC.  Blah!

igthebold

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #25 on: May 18, 2012, 07:12:19 AM »
2K square feet is probably too small for us -- a family with 3 kids and one large dog.  I think the sweet spot will be around 2700 square feet.  Not as severe as a 50% downsize, but still significant.  Probably talking in the 350K range for something newer or updated, and in a good school district (planning on public schools).   

I know we all have different situations, but I would challenge you to at least do a thought experiment on what it would be like to live in 1000sf with a family of 5 + dog. How would you make it work? What would you get rid of? Where would you put stuff? How would you design the living spaces?

I have a family of 5 with no dog, and we moved into a 1700sf house. We were aiming for 1500sf, but the location of this house was too good. We spend most of our time at home.

For inspiration: http://www.tumbleweedhouses.com/  :)

WageSlave

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #26 on: May 18, 2012, 10:32:22 AM »
If you haven't seen this already, take a look at FIRECalc.  Plug in your net worth, your annual spending, and how long you need that (X years), and it tells you your chances of success based on every possible X-year historical scenario.  Note there are tabs at the top of the main page where you can tweak how FIRECalc performs its analysis.

For example, you said your current portfolio generates $43k/year.  According to FIRECalc, assuming X=50 years, you need a portfolio of about $1.3mm to have a 100% chance of sustaining that $43k/year (at least based on historical data).  But that's just with plugging in the basic three numbers; your portfolio is probably different than what FIRECalc assumes (see the "Your Portfolio" tab).

Now, FIRECalc isn't the last word in retirement calculators, but if you play with it enough, you'll probably get a feel for how portfolio and spending changes can affect your chances of long-term success.

I don't know if this is Mustachian or not, but given that you're willing to move, what about building a new house?  I'm sure the up-front costs of building are much higher than buying a "used" house, but: if you plan to live there for a long time, and you spend the money to make the house super-efficient, it will probably pay off in the long run.

Another benefit of building is that you can have better space utilization.  My wife and I like looking at houses for fun.  Based on our observations, we came to the conclusion that layout matters just as much as square footage.  We've seen houses that differed by 1000 square feet, but we've often preferred the smaller ones just because the layout better matches our needs.  And in the long-run, a smaller house will always be cheaper to heat, cool and maintain.  I guess you could call this "living space efficiency", and efficiency in general is really a fundamental underpinning of Mustachianism.

As you said, your annual spend is $76k, but over half that is on the house ($30k morgage + $10k property tax + $4.8k utilities).  If you buy outright, the mortgage goes away, putting you at $46k/year annual spend.  That's only $3k away from your current passive income.  It should be fairly easy to save another $3k/year by moving (lowering property taxes) and/or other "fat trimming".

Tools like FIRECalc can help you test out different scenarios: e.g. what's the impact of selling off some of your portfolio to buy your house outright?

Is part-time work an option/possibility?  You currently work from home, what are the chances you could negotiate (for example) a 50% pay cut for 50% fewer working hours?  Or maybe 50% fewer working hours, but a 65% pay cut, and you keep your health insurance (eliminating another variable)?

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #27 on: May 19, 2012, 11:29:11 AM »
700:    food + dining                          // baby food is expensive

My two cents, which has nothing to do with moving or investment advice: I have a 19 month old and we spent $0 on baby food.  I'm assuming, because of the reasoning provided above, that you're buying baby food.  Make your own and stop buying the stuff....it'll save you hundreds of dollars and keep your kids digestive tract free of all the preservatives that come free with the stuff (even the so-called organic baby food.)  If nothing else, their guts will thank you for it. :)

I am sure it would be cheaper to make the baby food ourselves, but the baby food we're getting appears to be nothing but whole ingredients.

There is a convenience factor to just pulling out a jar of ready-to-eat sweet potatoes compared to trying to cook and puree some sweet potatoes, but I am intrigued enough by your comment to do some research.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #28 on: May 19, 2012, 11:38:10 AM »
For baby food, I strongly encourage the use of a baby food maker such as the Baby Chef Ultimate Food Maker. You can also use a normal food processor and ice cube trays, if you just want those features. But the maker is still worth its money; it self contains steaming foods, pureeing them, works as a bottle warmer before they're onto baby food, and is super easy to clean.

It's the biggest money saver you could invest in, and it's really not that hard.

Gerber: $1 gets you 1 serving of organic sweet potato, high in preservatives.
Homemade: $1 gets you one organic sweet potato, that makes over 6 (Gerber-sized) servings, preservative free.

Freeze the portions into ice cube trays and put them into ziplock bags when frozen. Frozen, they last over a month. In the fridge, they last a week or so. Pop them out of the freezer into a bowl, microwave for a minute, and serve.

As for Tennessee, if you want to move to Tennessee I strongly encourage East Tennessee (Knoxville area). It's a much more peaceful area than west Tennessee (Nashville area), as well as more progressive.

Thanks for the tip on the baby food maker.

There areas in Tennessee I am looking at are the Maryville/Seymour/Sevierville, so right in East Tennessee.  I also am looking at a place called Signal Mountain near Chattanooga, which looks great (the downside is homes are a bit more expensive there).  I'd love to hear from anyone who lives in Eastern TN for their opinions on the area.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #29 on: May 19, 2012, 11:41:01 AM »
As a former 12-yr resident of Austin, two things stand out:

1.  100/mo for lawn care.  If you are on the typical austin 0.15 acre lot, you are wasting your money.  Unless you live on a serious hill/cliff, do this yourself.  At a minimum, this should come out of the budget once you are retired.  My 86 year old grandmother and her 92 year old husband mow their own 2+ acre lot; you can do it too!
2.  10K/yr for taxes tell me you house is worth >$400K.  A 2700 sq ft house in a good school district in Austin can be found for  250-275K if your willing to look outside of the premier districts.  We sold a similar size house in a nice area (620/Parmer, if you know the area) that was in RRISD.  We sold in late '07 for 245K; that house went on the market late last year for $280K. 

PS.  Don't move to CO; it is full of Texans, Californians and Yankees, just like Austin :)

I plan to do all my own yard work if I wasn't working full time.  I can justify the expense now as a time saver (and also because I don't own a mover/trimmer/etc).  The lot is about 1/3 acre.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #30 on: May 19, 2012, 11:43:28 AM »
2K square feet is probably too small for us -- a family with 3 kids and one large dog.  I think the sweet spot will be around 2700 square feet.  Not as severe as a 50% downsize, but still significant.  Probably talking in the 350K range for something newer or updated, and in a good school district (planning on public schools).   

I know we all have different situations, but I would challenge you to at least do a thought experiment on what it would be like to live in 1000sf with a family of 5 + dog. How would you make it work? What would you get rid of? Where would you put stuff? How would you design the living spaces?

I have a family of 5 with no dog, and we moved into a 1700sf house. We were aiming for 1500sf, but the location of this house was too good. We spend most of our time at home.

For inspiration: http://www.tumbleweedhouses.com/  :)

Wow, that tumbleweedhouses stuff is amazing.  If I were single, I would actually seriously consider something like that.

I will do the thought experiment you suggest... maybe that will make us realize a 2700 square foot house is unnecessarily large.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #31 on: May 19, 2012, 11:50:12 AM »
I don't know if this is Mustachian or not, but given that you're willing to move, what about building a new house?  I'm sure the up-front costs of building are much higher than buying a "used" house, but: if you plan to live there for a long time, and you spend the money to make the house super-efficient, it will probably pay off in the long run.

Another benefit of building is that you can have better space utilization.  My wife and I like looking at houses for fun.  Based on our observations, we came to the conclusion that layout matters just as much as square footage.  We've seen houses that differed by 1000 square feet, but we've often preferred the smaller ones just because the layout better matches our needs.  And in the long-run, a smaller house will always be cheaper to heat, cool and maintain.  I guess you could call this "living space efficiency", and efficiency in general is really a fundamental underpinning of Mustachianism.

As you said, your annual spend is $76k, but over half that is on the house ($30k morgage + $10k property tax + $4.8k utilities).  If you buy outright, the mortgage goes away, putting you at $46k/year annual spend.  That's only $3k away from your current passive income.  It should be fairly easy to save another $3k/year by moving (lowering property taxes) and/or other "fat trimming".

I have thought about having a house built that is super efficient, and only has the rooms/space we need.  For example, I think a formal living room and dining room are obsolete and unnecessary.  On the other hand, I'd like a walk-in pantry.   The thing about getting something built, is I have no idea where to start, and I would be terrified of being ripped off or scammed.

Is part-time work an option/possibility?  You currently work from home, what are the chances you could negotiate (for example) a 50% pay cut for 50% fewer working hours?  Or maybe 50% fewer working hours, but a 65% pay cut, and you keep your health insurance (eliminating another variable)?

Part time work is a possibility.  I am a programmer, so I could work from home if I find clients who are receptive to that.  Also, trying to do something on my own part-time is a possibility (e.g., writing mobile apps).   Ideally though I don't want to feel like I have to drum up contract work to make ends meet.

Taking a 50% pay cut for 50% fewer working hours is an intriguing idea too.  I've been with my current company for many years (15), so there is a good chance they would go for it.  Not sure if I would happy with that or not... part of me wants total freedom, at least for a while.

Melissa

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #32 on: May 20, 2012, 12:49:16 PM »
As a family with three kids (12, 11, and 9), and only a few years away from FI some questions and ideas.

$120 a month for kids activities for two children who are both under the age of 2?  Are you kidding?  What type of activities are they involved in.  We aren't even at that amount even with school sports and music lessons.  Kids really don't need much at this age and I have found that it is more about an outlet for the mom's to siocialize with other mom.  There are numerous moms group out there that are free (or close to it) that provide many activites for both.  Our LaLeche league had mnthly meetings and family outings that were free.  Our only commitment was so sign up to tae a new mom dinner twice a year.

$700 for food.  How much baby food can one kids eat or does this include formula as well?  We are currently around $800 a month (including mostly grass fed meat and organic vegetables).  How much of this accounts for eating out or getting lunch while at work?

$100 for yard work.  I saw from one of your other posts that you said you would be doing your own yard work once you weren't working full time.  How many hours a week is full time?  It only takes us 3 hours a week to take care of 3 1/2 acres of yard.

Also, even if you don't get rid of the mortgage, you should definately consider refinancing.  We just received a quote for 3.0% on a 15 year mortgage.

Part time work is always an option and then ou can find something to do that interests you.  MMM does that on a regular basis and definately seems to enjoy it

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #33 on: May 20, 2012, 12:59:30 PM »
I am sure it would be cheaper to make the baby food ourselves, but the baby food we're getting appears to be nothing but whole ingredients.

There is a convenience factor to just pulling out a jar of ready-to-eat sweet potatoes compared to trying to cook and puree some sweet potatoes, but I am intrigued enough by your comment to do some research.

Here's a research protocol that should be easy to implement

Required equipment:  sweet potato, microwave, toddler, standard kitchen tools;
Procedure: 
  • place sweet potato in microwave, cook until done -- easily tested with a fork; many contemporary
    microwaves have buttons that cook potatoes automatically;
  • remove potato from microwave; slice open, remove assorted chunks
  • check that potato is adequately cool (or allow to cool to no more than "warm," test by eating several bites);
  • place chunks on plate or in small bowl, provide to toddler (positioned in e.g. a high chair or your lap), perhaps with a small spoon (not really essential, toddler can use fingers to pick up potato bits);
  • observe toddler, take careful field notes

A nineteen-month old doesn't really need stuff pureed, and as previously noted, there is plenty of squishy stuff available that isn't "baby food" (applesauce, yogurt, scrambled eggs).  But no reason not to provide squishy stuff (many cooked veggies, bananas, bread), and small not-squishy stuff (e.g. Cheerios, crackers) for them to grab with their fingers.  Our kid pretty much ate what we ate starting at about that age, with some substitutions. 

Note that whereas as recently as 5 or 6 years ago we were advised to delay introducing foods to avoid creating food allergies, current research seems to suggest that the reverse is true, that eating a wide variety of food earlier reduces the likelihood of developing allergies against whatever is included as part of the diet.

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #34 on: May 20, 2012, 03:47:50 PM »
Great position to be in!  I would consider moving either to another area in Texas and not quiting the job yet (sounds like you work at home so commuting would be occasional) or if you are going to move away, possibly planning to get a job where you are moving then quiting after a year or so.  That would help w/ health insurance, and give you a chance to make some but not all changes at once.
  Some ideas that seem insane today, will start making sense after thinking about them for a few months.  Right now, money is easier to spend than time.  You are making a huge change, in that time will soon be easier to spend than money.  Your taste and expectations may change in housing, too.  For most of us they are determined by what your friends and family have.  Many of your friends are going to change.  When I lived in the Bay Area my 800 sq foot house was amazing - b/c all my friends were renters.

2handband

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #35 on: May 20, 2012, 03:54:51 PM »
Wow, this is amazing... someone who is simultaneously better and worse off than me.

One one hand, $43,000 a year is more than I have ever made, by a huge margin. And that's passive income???

On the other hand, your monthly expenses are, to my way of thinking, utterly crippling. Mine are about $500 a month not counting business expenses.

2handband

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #36 on: May 20, 2012, 05:13:34 PM »
K, here's what I would do about that expenses list:

1) Get out from under that mortgage any way you can do it. Send the keys back to the banker if you can't sell the house. That thing is a vampire sucking away your life's blood.

2) Find someplace with cheaper utilities because holy shit.

3) Turn your lawn into vegetables; lawn care problem solved. Helps with the food bill too.

4) Cable=bye bye. Sell the TV while you're at it.

5) Do you really need the smartphone? I keep a cellphone 'cus I play guitar for a living and these days if you can't be contacted instantly they're gonna call somebody else. So I understand if you need one. But my plan doesn't cost anything like $75. You don't need texting or data service on your phone.

6) Holy fuck... $700 for food??? For starters don't buy the baby food; that stuff is the biggest scam on earth. Plant a garden. If you don't have a large lot you can usually find space to borrow; I have a tiny corner lot in a trailer park but grow about 1/2 acre worth of food. Grow stuff you can store without having to freeze it; it'll save hugely on your utility bill. Dried beans, winter squash, and root crops are your friends. Give the restaurants a miss. Shop the hell out of sales; my wife keeps a meticulous eye on the local grocery fliers and if there's a great deal on something we eat a lot of she'll buy a six-month supply.

7) $500 worth of shopping? I think the first thing you want to do is start equating items in the store with labor. Every time you're thinking about buying something ask yourself how many hours of your labor will be required to possess it, and for christ's sake is it worth it? For me the answer is almost always no. A big problem here is usually the spouse, and here's how I handled it. When she wanted something I would point out how many hours I'd have to work for her to have it, and asked her if SHE would be willing to do that work herself. Over time that kind of became an agreement between us: we both hate working, so whichever one of us wants non-essential shit had better pony up the hours of labor to get it.

If you do need something (or want it bad enough to work for it) see if you can find it used. Despite what advertising tells you, you almost never need the latest version of whatever it is you're buying. Computers are my favorite example; unless you're a hardcore gamer you don't need a modern computer, and a computer is more than, say, two years old it has no monetary value whatsoever. You can get a perfectly serviceable four or five year old computer for like $25 bucks, and often for free. Put Linux on it so you don't have to pay $50 a year for anti-virus and be happy. And did I mention I play guitar for a living? Anyone who buys guitars and related equipment new is an idiot. If you shop used you can get pro-level gear for mid-level (and sometimes even beginner-level) prices.

It also pays to learn to scrounge. You wouldn't believe the stuff I get for free just by keeping an eye on curbs. I scored a fold-out sofa last year with brand-new vinyl upholstery... perfect for kids and pets! The lady who had it had reupholstered it thinking she could sell it, totally forgetting that unless it's really expensive to begin with used furniture is worth exactly dick (not to mention that she chose butt-ugly upholstery). I recently picked up a 26" flat-screen TV to use as a computer monitor. I was like the last guy in the world to have a big old CRT monitor on my desk because I was simply unwilling to pay to replace a perfectly serviceable monitor, but then the neighbors upgraded to a bigger TV and left this one on the curb. WTF? That's mostly passive scrounging... if I really need something specifically I've learned over the years how and where to hunt for it.

8) If you work from home, what's dragging the $50 worth of fuel out of your pocket? I also notice you haven't listed car insurance under your expenses. You're not paying full coverage, are you?

9) I have to ask: what activities are a 16 month and 4 month old involved in that cost $120?

« Last Edit: May 20, 2012, 05:18:53 PM by 2handband »

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #37 on: May 21, 2012, 12:56:11 AM »
As a family with three kids (12, 11, and 9), and only a few years away from FI some questions and ideas.

$120 a month for kids activities for two children who are both under the age of 2?  Are you kidding?  What type of activities are they involved in.  We aren't even at that amount even with school sports and music lessons.  Kids really don't need much at this age and I have found that it is more about an outlet for the mom's to siocialize with other mom.  There are numerous moms group out there that are free (or close to it) that provide many activites for both.  Our LaLeche league had mnthly meetings and family outings that were free.  Our only commitment was so sign up to tae a new mom dinner twice a year.

$120/month breaks down as $60/month for swim class (once/week) and $60/month for kindermusic (once/week).  Maybe those are terribly inflated prices, but my kid seems to get a lot out of both of these activities.   Maybe free stuff would be just as useful.

$700 for food.  How much baby food can one kids eat or does this include formula as well?  We are currently around $800 a month (including mostly grass fed meat and organic vegetables).  How much of this accounts for eating out or getting lunch while at work?

The food costs are for all food -- grocery and eating out  (and would include non-food items from the supermarket too).   We might get take out or go to a restaurant once or twice a week, at non-extravagant places.

$100 for yard work.  I saw from one of your other posts that you said you would be doing your own yard work once you weren't working full time.  How many hours a week is full time?  It only takes us 3 hours a week to take care of 3 1/2 acres of yard.

Full time means about 40 hours a week, but it can flucuate.  Not really interested in buying the equipment before I move though.

Also, even if you don't get rid of the mortgage, you should definately consider refinancing.  We just received a quote for 3.0% on a 15 year mortgage.

Refinancing now doesn't make sense, as we'll be moving in less than a year for sure.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #38 on: May 21, 2012, 01:01:38 AM »
Wow, this is amazing... someone who is simultaneously better and worse off than me.

One one hand, $43,000 a year is more than I have ever made, by a huge margin. And that's passive income???

On the other hand, your monthly expenses are, to my way of thinking, utterly crippling. Mine are about $500 a month not counting business expenses.

If your definition of worse off is spending more than $500/month to live, then I suspect the vast majority of people in the USA are worse off than you.

2handband

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #39 on: May 21, 2012, 05:14:37 AM »
Wow, this is amazing... someone who is simultaneously better and worse off than me.

One one hand, $43,000 a year is more than I have ever made, by a huge margin. And that's passive income???

On the other hand, your monthly expenses are, to my way of thinking, utterly crippling. Mine are about $500 a month not counting business expenses.

If your definition of worse off is spending more than $500/month to live, then I suspect the vast majority of people in the USA are worse off than you.

:D 

My definition of worse off is having your livelihood dependent on income, really. I'd rather chew my own gonads off than work a job. Every job I've ever had, I've wanted to commit suicide inside of a week. To me, the $500 is way too much! A lot of people tell me that $500 is impossible tho, so to show it can be done my breakdown is as follows:

1) Lot rent: $250. This one is the real ball-crusher.

2) Electrical: $30. We have to work hard to keep it around this point, but it's the only real utility bill we have. Water service is part of our lot rent, and because we're low income we get fuel assistance in the winter (no, I don't have any qualms about this; in fact I rather relish it for philosophical reasons that go beyond the scope of this thread). If the fuel assistance went away tomorrow I have a wood stove tucked in the back room.

3) Internet/phone: $50. The internet is our one serious indulgence, and essentially a huge concession I'm making for my wife. For myself, I'd drag the laptop down to the MacDonalds half a mile away and use their free wifi. No, they're not gonna let you sit there all day without buying anything, but a cup of coffee twice a week is a lot cheaper than the home internet service.

4) Car insurance: $50.

5) Fuel: varies wildly depending on time of year. During the summer we almost never drive. Most of the fuel actually falls under business expense (I do drive to rehearsals and such cus my amp doesn't fit on my bike ;) ), so I'm not including it here. But we almost never spend more than $25 a month on gas, and I'd say that's the extreme outer limit.

6) Misc expenses: Call it $50 or so. We shop used, curb-graze, dumpster dive... anything at all to avoid spending money.

7) Food: we're on food stamps due to our low income status, but we almost never use them because I grow the vast majority of what we eat. Last I checked our food stamp balance was around $4000. So what we spend on food is negligible, not counting the bar food I eat sometimes when I'm working... that's a tax write-off.

I'm not including my business expenses (strings, picks, cables, cellphone, fuel, occasional gear purchases) because they come straight off the top of my gig money and are not counted as income.

WageSlave

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #40 on: May 21, 2012, 07:22:52 AM »
Part time work is a possibility.  I am a programmer, so I could work from home if I find clients who are receptive to that.  Also, trying to do something on my own part-time is a possibility (e.g., writing mobile apps).   Ideally though I don't want to feel like I have to drum up contract work to make ends meet.

Taking a 50% pay cut for 50% fewer working hours is an intriguing idea too.  I've been with my current company for many years (15), so there is a good chance they would go for it.  Not sure if I would happy with that or not... part of me wants total freedom, at least for a while.

Does your current employer offer any kind of longer-term unpaid leave options?  My previous employer offered two-week unpaid leaves.  I never took advantage of it, but, where I'm at now, it's something I might use from time to time.  I'm just throwing it out as an idea, maybe you could negotiate something like two months off unpaid, but still have your job.  Reading into what you are saying, I have a suspicion you want to have 100% free time now... but I caution against letting yourself become a victim of the grass is always greener mentality.  A long unpaid leave gives you a real taste of what retirement feels like, without the risk of losing your job if you find you're not completely prepared for retirement (beyond financially, meaning intellectually, emotionally, etc).

Just throwing out more ideas!  :)

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #41 on: May 21, 2012, 08:04:00 AM »
For baby food, I strongly encourage the use of a baby food maker such as the Baby Chef Ultimate Food Maker

Thanks for the tip on the baby food maker.

We just use a stick blender. We tried a hand grinder, but it didn't work very well.

2handband

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #42 on: May 21, 2012, 08:06:44 AM »
For baby food, I strongly encourage the use of a baby food maker such as the Baby Chef Ultimate Food Maker

Thanks for the tip on the baby food maker.

We just use a stick blender. We tried a hand grinder, but it didn't work very well.

A standard kitchen blender works fine. We got ours at a thrift store for $2.00.

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #43 on: May 21, 2012, 09:44:00 AM »

$120/month breaks down as $60/month for swim class (once/week) and $60/month for kindermusic (once/week).  Maybe those are terribly inflated prices, but my kid seems to get a lot out of both of these activities.   Maybe free stuff would be just as useful.


A question that I haven't seen touched in this thread but that keeps occurring to me, at least, is what your wife's involvement in these goals and your family activities is.  Does she share your enthusiasm for the plan you describe?  Is she in the workforce, or out of the workforce?  And assuming the answer to question (1) is yes, how are you working with her to figure out how each of you can contribute to getting where you (both) want to be? 

If she is the parent primarily responsible for managing your children's activities at this point, I'd guess it would be pretty easy to cut out the $120 above and replace those with free equivalents, as one small example, but obviously if your and her goals diverge, that may not be an option -- or even make sense.

austin_ice9

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #44 on: May 22, 2012, 12:11:30 AM »

$120/month breaks down as $60/month for swim class (once/week) and $60/month for kindermusic (once/week).  Maybe those are terribly inflated prices, but my kid seems to get a lot out of both of these activities.   Maybe free stuff would be just as useful.


A question that I haven't seen touched in this thread but that keeps occurring to me, at least, is what your wife's involvement in these goals and your family activities is.  Does she share your enthusiasm for the plan you describe?  Is she in the workforce, or out of the workforce?  And assuming the answer to question (1) is yes, how are you working with her to figure out how each of you can contribute to getting where you (both) want to be? 

If she is the parent primarily responsible for managing your children's activities at this point, I'd guess it would be pretty easy to cut out the $120 above and replace those with free equivalents, as one small example, but obviously if your and her goals diverge, that may not be an option -- or even make sense.

Wife does not work.  She likes the idea of me being able to spend more time with the family, and I'd say is generally supportive of me not working full time (but not as enthusiastic about the idea as I am).  Her main concern is with health care costs, and we are going to have three kids.

igthebold

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #45 on: May 22, 2012, 06:58:38 AM »
We just use a stick blender. We tried a hand grinder, but it didn't work very well.

I don't remember any special baby cereal other than rice cereal. I believe we just kind of made our normal food and gave our children some of it while they were getting used to it. If anything, we mashed stuff with a fork. In other words, I don't think it has to be that complex.

We did try a hand grinder our friend lent us and it was nearly worthless.

2handband

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #46 on: May 22, 2012, 07:26:23 AM »
We just use a stick blender. We tried a hand grinder, but it didn't work very well.

I don't remember any special baby cereal other than rice cereal. I believe we just kind of made our normal food and gave our children some of it while they were getting used to it. If anything, we mashed stuff with a fork. In other words, I don't think it has to be that complex.

We did try a hand grinder our friend lent us and it was nearly worthless.

Yup. i did run a few things through the blender, but not much. Find stuff that's already soft enough to eat... mashed potatoes, for instance.

bogart

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #47 on: May 22, 2012, 07:28:17 PM »

Wife does not work.  She likes the idea of me being able to spend more time with the family, and I'd say is generally supportive of me not working full time (but not as enthusiastic about the idea as I am).  Her main concern is with health care costs, and we are going to have three kids.

OK.  Well, far be it from me to offer advice on familial divisions of labor, but I'd guess your wife has as much or more opportunity as/than do you to cut back on some of the obvious areas in the short term --
  • kids' activities becomes $0 per month, as suggested
  • cut $200 off grocery bill, starting with quitting or cutting way back on purchased baby food
  • cut back on utilities.  tough season coming up to do this in Austin, but you do line-dry all clothing, right (probably not allowed by the HOA ... ?)?
  • Ditto the shopping.  See the cloth diaper thread.

Obviously either of you can do these things, but to the extent that they are processes managed principally by your wife (?) I suspect she's better positioned than are you to change them.

gooki

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Re: Case Study: Retire @ 40 w/ 3 kids + 1 dog
« Reply #48 on: May 23, 2012, 03:43:59 AM »
Meh. I still vote make some minor cut backs and go for it. I don't see any need for you to drastically change your lifestyle with the exception of actually leaving your full time job. Your expenses aren't way out of line, we spend $40 a month on swimming (that's once a week for the three of us) and about $600 on food (different country).